ISLAMABAD: Pakistan has sent Memorandum of Economic and Financial Policies (MEFP) draft to International Monetary Fund (IMF) as talks underway over the revival of $7 billion Extended Fund Facility (EFF) stalled for months.
According to sources, the Fund will review the MEFP draft – sent by officials of Ministry of Finance and Revenue to seek a response – as Islamabad has agreed to several conditions including increasing energy prices and improve tax collection.
Sources told that the IMF will respond to the finance ministry officials by tomorrow. The government was likely to decide in principle to increase the sales tax as demanded by the lender, they claimed.
Sources further claimed that the government would increase the sales tax in various categories. The government is likely to take a decision to bring an ordinance for the mini-budget worth Rs170 billion, sources added.
It is pertinent to mention here that virtual talks between the International Monetary Fund (IMF) and Pakistan for the completion of the ninth review of $7 billion loan programme began a day earlier.
The officials of the finance ministry would brief the IMF about the implementation of the conditions set by them for the revival of the loan program.
Meanwhile, the incumbent government accelerated implementing ‘tough conditions’ tabled by Fund to revive $7 billion Extended Fund Facility (EFF) stalled for months.
Sources told that the federal cabinet has approved the revised circular debt management plan through circulation, under which the government will end subsidies and jack up electricity price by Rs7.91 per unit in four quarterly adjustments – Feb-March 2023, March-May, June-August and September-November.
Sources further claimed that the federal cabinet also approved the withdrawal of electricity subsidy of Rs65 billion given to the exporters and farmers, with effect from March 2023. The subsidy of Rs12-13 paise per unit on electricity given to export sector will be withdrawn, they added.
Moreover, almost Rs250 billion will be recovered from electricity consumers by June 2023. Under the circular debt management plan, the government would impose a surcharge of Rs3.39 paise per unit.
‘Pakistan receives MEFP draft’
Earlier on Feb 10, Finance Minister Ishaq Dar said that Pakistan had received the Memorandum of Economic and Financial Policies (MEFP) draft from the International Monetary Fund (IMF).
In a press conference, Dar said: “Pakistan is expected to receive $1.2 billion from IMF after the completion of ninth review of $7bn Extended Fund Facility (EFF).” He further said that Rs170 billion in new taxes would be imposed through a mini-budget.
The minister went on to say that the government and global lender officials would hold a virtual meeting in this regard on Monday.
